Page 44 - Banking Finance December 2022

ARTICLE

Benefits of the scheme: National Agricultural Cooperative Marketing Federation
of India Ltd. (NAFED).
Conversion of agricultural residue, cattle dung and municipal
solid waste (MSW) into CBG in a commercial scale is Oil & gas companies are entering into MoU with State
expected to have the following benefits: Governments for facilitating CBG plants. Indian Oil has
Import reduction of natural gas and crude. entered into MoU with Government of Punjab and
Government of Haryana for facilitating setting up of
Utilization of agricultural residue, cattle dung and MSW
CBG Plants. Execution of similar MoU also being
for the production of CBG and thus to achieve reduction
explored with State Governments of Chhattisgarh, Uttar
in emissions and pollution.
Pradesh and Andhra Pradesh.
A boost towards fulfillment of National commitments
in achieving climate change goals.
Priority Sector lending:
Providing a buffer against energy security concerns and
As per the revised Priority Sector Lending (PSL) guidelines
crude/gas price fluctuations.
issued by Reserve Bank of India (RBI) dated 04th September
Contribution towards Swachh Bharat Mission through 2020, Loans for setting up Compressed Biogas (CBG) plants
responsible waste management have been included as fresh categories eligible for finance
Lowering pollution and carbon emission. under priority sector, which would enable better credit
penetration for setting-up CBG plants.
Providing additional source of revenue to the farmers,
rural employment and amelioration of the rural
Fertilizer control order:
economy
To promote the manure produced from CBG plants,
Fermented Organic manure (FOM) and Digested Biogas
Enablers of the scheme:
Slurry have been included under Fertilizer Control Order
Assured Long term Pricing:
(FCO) 1985.
Ministry of Petroleum and Natural Gas provides support for
CBG projects under Sustainable Alternative Towards
Opportunities to finance under the
Affordable Transportation (SATAT) in the form of assured
offtake of CBG @Rs. 46/ Kg by Oil Marketing Companies. scheme:
As per information provided by Ministry of Petroleum
An Expression of Interest (EOI) to procure CBG by Indian Oil
and Natural Gas, Govt of India, it is planned to roll out
was released under the SATAT scheme on 1st October 2018.
5000 CBG plants across India in phased manner by 2025.
As per the EOI, the price offered for CBG by Oil & gas
The Oil and Gas Marketing companies are issuing Letter
companies is as follows:
of Intent (LOIs) to entrepreneurs for setting up CBG
Plants.
Price of CBG meeting IS 16087: 2016 standards, compressed
Reserve Bank of India in its master directions on Priority
at 250 bar and delivered at Indian Oil Retail Outlets in
Sector lending has classified CBG projects under
cascades: Rs.46/- + GST/kg.
Agriculture (Infrastructure Activities).
Facilitation by OMCs through Letter of Intent Looking in to emerging opportunities for the banks to
(LOI): finance CBG projects over the next few years, Bank have
designed new product to establish CBG units.
Oil & gas companies shall facilitate Plant owners in
design, erecting, construction, commissioning of the The scheme is promoted by the Government and backed
CBG Plants. by Capital subsidy and it is the responsibility of the Bank
to mobilise the scheme towards successful
Oil & gas companies will off-take and market the CBG
implementation to reach the Governments' goal.
produced.
Oil & gas companies will also facilitate marketing of Bio-
Sources of funding for Compressed
manure produced from the CBG Plants. For facilitating
the same, Indian Oil has entered into MoU with Biogas plants:

44 | 2023 | JANUARY | BANKING FINANCE